The fund insures more than $7 trillion in deposits. By 2018, it will have enough money to cover 1.15 percent, or $80.5 billion, of those $7 trillion in deposits.

If today’s projections hold, if there is ever a run on FDIC-insured banks, the money might not be there to give depositors any or all of their cash.

The FDIC, of course, is one of the federal regulatory agencies that has been demanding in the past three years that banks boost their capital reserves – money to cover deposits – to 9 to 12 percent. It isn’t doing the same for itself.

The Deposit Insurance Fund was in the red by $21 billion in 2009. In the second quarter of 2007, just before the financial crash started, the fund peaked at $50.2 billion, or 1.2 percent of all deposits, according to the FDIC.

The situation where the regulator requires banks to maintain capital reserve levels that it doesn’t require of itself always infuriated New Mexico’s former top banking regulator Bill Verant. In nearly every conversation this reporter had with him, Verant mentioned the double standard.

The FDIC has been quick to point out that it has a line of credit with the federal government, but who’s got $7 trillion when total federal revenue was $2.2 trillion in Fiscal Year 2011 (according to the Congressional Budget Office), while the government allocated $3.7 trillion for all of its programs? And remember the deficit? The CBO said it’s about $1.48 trillion for FY 2011 alone, providing the revenue and outlay numbers don’t change because of Capitol Hill’s political wrangling over the budget. The total U.S. debt is about $14.5 trillion.

Banks, which are charged quarterly premiums by the FDIC, pay for the Deposit Insurance Fund.

Trembling yet?

dfdomrzalski@bizjournals.com | 505.348.8306

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